Software Engineer Salary Negotiation: How To Negotiate A Software Engineer Job Offer
Are you currently interviewing for a software engineering role or have you received a job offer for a software engineer role? If your answer is yes, it’s time to prepare to negotiate your job offer. Why? Negotiating your software engineer job offer—and any job offer for that matter—increases your chances of securing competitive compensation.
Despite the amazing compensation software engineering is known for, it is possible to negotiate your job offer higher—even if it may seem intimidating to do so.
In fact, we’ve had great success helping software engineers navigate the salary negotiation process and negotiate a better job offer across a variety of tech companies. This article outlines how to negotiate a software engineer job offer using The Salary Negotiator’s tried-and-true negotiation strategy. Below, we dive into the components of a software engineer's job offer and then outline specific steps on how to negotiate better compensation.
Get guidance from a salary negotiation professional on how to negotiate a software engineer salary, reach out to Our Team now.
Take our Salary Negotiation Courses or download our Salary Negotiation Templates to receive our strategies, preparing you for all aspects of a software engineer salary negotiation.
Understanding the Compensation Components of a Software Engineer Job Offer
Software engineering roles are prized in the tech industry, so you can expect their salaries to be competitive. However, it's still important to know what the company is willing to pay for the role you've been recruited for.
When you receive a job offer in software engineering, it will include multiple compensation components that make up your total yearly compensation. Understanding each of these components before you start negotiating will not only ensure you’re familiar with your entire offer, but it will also improve your chances of increasing your whole compensation package.
The base salary is the number most people care about when they receive an offer, but it’s just one part of your overall compensation. In the tech industry, most software engineers also receive a yearly performance bonus, an initial equity grant, a sign-on bonus (if you negotiate), and other benefits like health insurance and free food.
You must consider each of these components when evaluating the compensation in a software engineer job offer. For example, here is what the total compensation of a Meta Software Engineer Level 4 (E4) may look like in their initial offer:
Software Engineer Base Salary
The first component of an offer will be the software engineer’s base salary, which is the fixed guaranteed pay you receive in exchange for the work you do. It is not tied to your performance. In the United States, most companies pay out base salaries either biweekly or monthly.
There will be a base pay range for each level of software engineering with a set minimum and maximum amount. For example, a Senior Software Engineer salary will be different than a Principal Software Engineer salary or Staff Engineer Salary at the same company. Rarely will the offer come in at the top of the pay band for a software engineer, so your goal is to determine the pay range so you can negotiate to the higher end of that pay band.
Software Engineer Performance Bonus
Most software engineer job offers include a yearly performance bonus, which is usually a percentage of your base salary and is based on both personal and company performance. The target percentage typically ranges depending on your software engineering level. It’s possible to exceed most target percentages if the company outperforms its goals and you achieve a strong performance rating, but it’s best to assume the average payout when evaluating this component as part of a software engineer’s total compensation.
This is a sizeable sum that makes a big difference in a software engineer's total yearly compensation, but in most cases, we have found it to be non-negotiable, and there’s often a set target percentage for all software engineers depending on their role level. That said, since it’s usually a percentage of your base, this metric will increase your total compensation as you negotiate a higher base salary.
Software Engineer Initial Equity Package
Equity is a key component of many tech based roles, whether that be for software engineer, product manager, or data scientist salaries, and it’s one that most individuals seek in their job offers. Software engineers may receive an initial equity grant in their job offer, which can be offered either as restricted stock (restricted stock units or restricted stock awards) or stock options. This grant will include a bundle of shares or options that vest over a defined timeframe (i.e., four years), called a vesting schedule. Equity is most common in job offers from companies in the tech industry (i.e., Google, Apple, Amazon, Microsoft, Meta—formerly Facebook) but you will see this at most startups and many public companies as well.
Equity can be an extremely valuable form of compensation for a software engineer, but it will fluctuate based on the market value of the company. If the company's share value goes up, you share in that increase, but if they go down, you share in that loss. The greatest consequence is that you forgo the equity if you leave the company before it vests.
It’s always smart to push for more equity, but our recommendation is to negotiate all components to ensure you reach the top end of the total compensation pay band.
Software Engineer Sign-on Bonus
Companies are generous with sign-on bonuses for software engineers, which is a one-time bonus that new employees receive as an incentive to join a company and cover any lost bonuses or unvested equity that they may give up at their current company. In our experience, we’ve found that not all companies provide a signing bonus in the initial offer, so you may need to negotiate to receive this component. At The Salary Negotiator, we’ve helped many software engineers receive a signing bonus by negotiating.
It’s important to note that even if you don’t have a competing offer or you’re not walking away from money at your current company, you can—and should—still negotiate for a software engineer sign-on bonus. Most sign-on bonuses are paid out within the first 30 days in one lump sum payment but don’t forget that there are payback conditions tied to it—meaning you’ll need to pay back the bonus if you depart the company within the first year. However, Amazon’s software engineer salary will include a sign-on bonus in year one and year two, which is paid out monthly instead of in one lump sum payment.
Software Engineer Equity Refresher
Some companies will offer an equity refresher (more stock) to software engineers, but most recruiters usually withhold when this refresher will take place and the expected yearly amount. This is common for equity refreshers at Apple and other companies that offer this perk. During the negotiation, you should ask if the recruiter will share insight into the amount and timeline of this compensation perk. We don’t include this compensation item in our total compensation calculation because most recruiters shy away from the specific details, making it hard to compare across offers.
Benefits and Perks for a Software Engineer
Companies are known for the benefits and perks they offer, whether that includes health insurance, a top-tier 401k plan, relocation assistance, fitness stipends, or even free food when working in the office. It depends on the size of the company, but for the most part, we have not found the benefits and perks for software engineers to be negotiable unless it is an under-the-table agreement with your hiring manager (i.e., your manager will let you take more vacation).
A top attraction to software engineering is working remotely, which has become a common component to negotiate—especially after the pandemic—and should be brought up during the interview process.
Five Key Steps to Negotiate a Software Engineer Job Offer
Before you begin negotiating your software engineer salary, it's important to understand how to navigate the process so you can increase your chance of success. Overall, it’s best to avoid starting the software engineer salary negotiation until you have an offer in hand; this gives you more leverage to negotiate.
Based on our experience helping hundreds of clients successfully negotiate their job offers, we’ve identified five essential steps to negotiate a software engineer job offer. If you’re looking for personalized advice on your specific offer, reach out to our team for an offer consultation.
1) Understand the Components of Your Software Engineer Job Offer
This first step should be easy since we’ve already reviewed the components of a software engineer job offer: base salary, performance bonus, initial equity grant, sign-on bonus, and any benefits and perks. Understanding your total compensation is the first, and arguably most important, step.
2) Complete Due Diligence on Your Software Engineer Job Offer by Asking the Right Questions
Every recruiter takes note when a software engineer asks good questions. Why? It shows you’re interested in the role and the company and that you care enough to dig deeper. Beyond that, asking good questions helps you develop an effective and successful counteroffer by getting clarification on items that the recruiter may have been vague about (i.e., What is the expected annual equity refresher for this role?).
Don’t forgo this step. Even if you think you already understand all aspects of the offer package, asking for clarification or more information will strengthen your counteroffer and your reasoning for why the hiring team should provide a better offer package. Every data point counts—make sure you start this phase of the negotiation right after you receive the initial offer.
You can use our list of Strategic Questions to Build Negotiation Leverage if you need help finding the right questions to ask about your software engineering offer.
3) Research the Compensation Ranges to Identify What Your Compensation Should Look Like
The compensation for software engineers will differ across companies so it’s important to conduct compensation research to understand the software engineer's pay range, the strength of your offer, and how much you should ask for. To ensure accuracy, you’ll need to assess the specific software engineering level and where it’s located, whether that be in-person or remote.
There are many resources available to help you determine an appropriate salary for a software engineer, such as Payscale or Comparably, but be sure to compare data across multiple resources. Pay ranges on these sites are publicly reported by current/past employees, so the pay may differ from what they may offer new employees (i.e., the current employees’ total compensation is higher because the stock price appreciated and their equity is more valuable), and it might be inaccurate if the employee didn’t correctly upload all compensation components.
As a software engineer, you’ll want to push for at least the mid- to top-end of the total compensation range for the SDE level—regardless of your experience or background.
You can download our Total Compensation Research Comparison Tool to help you with your SWE compensation research.
4) Send a Software Engineer Counteroffer to the Recruiter
This step is where a software engineer's salary negotiation officially kicks off! Once you’ve completed prepping for the salary negotiation (the first three steps), you’re ready to send a software engineer counteroffer.
In this step, you’ll present your ask to the recruiter in a kind and confident manner by referencing your research on the pay range and how the benefits differ from other companies and/or your current role. This can be done over the phone, but we strongly recommend doing this via email so you can draft exactly what you want to say, you don’t risk going off-topic, and you have everything in writing. It also gives the recruiter something that they can forward and use internally to support why you deserve a higher offer.
Just remember that you should always approach this step professionally and courteously, and you should treat the recruiter like a friend that is helping you transition seamlessly to the new company. To ensure proper communication, use our Counteroffer Drafts for examples if you need help formulating a strategic counteroffer.
5) Handle Any Objections from the Recruiter and Accept Knowing You Achieved the Best Software Engineer Salary
Sometimes it only takes one counteroffer and the recruiter will respond with an updated offer package. Usually, though, you’ll receive reasons from the recruiter for why they can’t make any increases to the software engineer's salary.
To handle an objection from a recruiter, respond calmly by stating you understand their constraints, but you would appreciate it if they can take your thoughts back to their team for one last look at the offer (even if they insist their team will just say no). Use this approach regardless of the recruiter’s reasoning and follow all of our objection handling scripts if needed.
You may have to handle a few objections, but once they agree to take it back to their team, they should come back with an improved offer. Continue to remain persistent yet respectful.
Once you receive a negotiated job offer that fits your personal needs and matches the software engineer pay bands you researched, you should be ready to accept and start planning the transition to the new company. Congratulations on your successful software engineer salary negotiation!
Negotiation Mistakes to Avoid During your Software Engineer Salary Negotiation
Recruiters are trained to get the best deal for the company. This doesn’t mean they’re going to lowball you, but they have a few tricks to get you to accept without negotiating. We’ve seen job seekers hit a few snags during their negotiations, so we’ve shared the key mistakes to avoid during a software engineer salary negotiation.
Avoid Sharing Salary Expectations Before You Get a Job Offer in Software Engineering
In our experience, sharing your salary expectations can work against you in receiving a fair job offer in software engineering so try to avoid sharing and answer like this.
If you share a lower compensation than what they could offer, they are more likely to offer you that low compensation. If you throw out a number higher than what they could offer, there is a chance that they could become disinterested and decide to go with a different software engineer. Remember that recruiters are working for the company, not you. Further, it doesn’t make sense to discuss compensation before you learn more about the specific role, their benefits and compensation, and whether those aspects feel like a good fit for you. After all, you’re also interviewing them.
Don't Be Afraid to Negotiate as a Software Engineer
Many people are afraid to negotiate out of fear of offending the recruiting team or losing the job offer— especially because the software engineer interview process can take a lot of time. Yet we’ve helped facilitate hundreds of successful salary negotiations, and we’ve never seen a company pull a job offer because a software engineer tried to negotiate. It's generally expected, regardless of the role level—whether it’s an individual contributor, software engineering manager salary, software engineering director salary, or a VP software engineering salary—you should negotiate your salary. Don’t let salary negotiation myths or hearsay talk you out of advocating for yourself!
Be Realistic by Doing Your Research
Software engineering pays very well, but it’s important to be realistic about what compensation is possible for the specific SDE job offer you received. Conduct research on what’s included in your total compensation and what the company pays for its software engineering role so you know what to expect and ensure you only push for compensation that the company can realistically provide. For example, the entry level software engineer salary would be different at a start-up or non-tech company compared to a Google software engineer salary, Apple software engineer salary, or Microsoft software engineer salary.
The Bottom Line
All software engineers can—and should—negotiate their job offer to receive a competitive compensation package and increase their overall career earnings. Following our how to negotiate salary software engineer strategy will help you approach this negotiation with confidence and ease.
If you want personalized advice on your software engineering salary negotiation from one of our professional salary negotiation coaches, Book a Consultation. Our experience helping software engineers negotiate job offers will help you get the compensation you deserve.
We also have our How to Negotiate Your Job Offer and How to Negotiate Your Current Salary courses, and Salary Negotiation Templates for those who want to learn at their own pace and gain the confidence and tools to negotiate their compensation. With downloadable email templates and job offer negotiation resources you will be prepared for all aspects of a software engineer salary negotiation.